Investing in Regenerative Agriculture and Food
Investing in Regenerative Agriculture and Food podcast features the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Hosted by Koen van Seijen.
Investing in Regenerative Agriculture and Food
97 Ethan Soloviev, enormous lack of regenerative ingredients for food companies and what to do about it
This is a check in interview with Ethan Soloviev, chief innovation officer of HowGood, a good friend of the podcast and one of the leaders in the regenerative food and agriculture space, where we talk about the regen hype. Where are we?
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Main topics of the interview:
- Regenerative business
- Regenerative investing
- The lack of ingredients grown with regenerative approaches and what large and small food companies are doing about that
More about this episode on: https://investinginregenerativeagriculture.com/2020/11/24/ethan-soloviev-2.
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Welcome to another episode of Investing in Regenerative Agriculture. Investing as if the planet mattered. Podcast show where I talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land, grow our food and what we eat. And it's time that we as investors big and small and consumers start paying much more attention to the dirt slash soil underneath our feet In March last year, we launched our membership community to make it easy for fans to support our work. And so many of you have joined as a member. We've launched different types of benefits, exclusive content, Q&A webinars with former guests, Ask Me Anything sessions, plus so much more to come in the future. For more information on the different tiers, benefits and how to become a member, check gumroad.com slash investing region egg or find the link below. Thank you. Welcome to, for sure, a wide-ranging interview with a friend of the show back after a while. I think it was probably the beginning of the year, the end of last year. I'm so happy to have him back here. He's the chief innovation officer at HowGood, but so much more, including a farmer, obviously applying regenerative practices. Welcome back, Ethan Soloviev.
SPEAKER_01:Thank you, Kim. Great to be here.
SPEAKER_00:So we have a lot of things to get through, and I know you have a hard stop, so we're going to start immediately. Let's start with some news, as we've done a number of news episodes last year, and there is actually a lot of news. This is not going to be a full news episode. We're going to talk about HowGood, what you've launched, and everything that's happening there. But let's get a few, let's say, big headlines. We're talking... the 16th of November, 2020. What's on your mind in terms of region ag or region business in general?
SPEAKER_01:Regeneration is moving very quickly now. I think we have been in an exponential growth curve for quite some time. And wow, can we see it, especially in the last few months? There's been some major announcements by really large companies. Cargo, one of the big four commodity agricultural companies in the world, announced that they were going to 10x what General Mills had said a few years before. And they said, we're putting 10 million acres into regenerative agriculture. Or I think they use a similar line We're going to advance regenerative agriculture on 10 million acres. That's pretty significant. Almost at the same time, might even have been the same week, Walmart announced that it was going to be a regenerative company. They didn't even say regenerative agriculture. They just said, we're going to be a regenerative company. And that was surprising, shocking, even hard to believe, certainly, especially, I think, because they were not following the trend that had been happening. So it was like, there's this linear thing, and we'll see it later this year when we update our regenerative agriculture industry, Matt.
SPEAKER_00:I was going to ask you about it. So there's going to be an update. Yes,
SPEAKER_01:absolutely. There's been a growth in the number of companies saying regenerative ag, regenerative ag, regenerative ag. But then this is almost like a mycelial thing went sideways and went over there. And we saw little clues of it from the Forum for the Future did their regenerative agriculture report funded by the Walmart Foundation earlier in the year. So there's a little sense of it. But then all of a sudden, Walmart comes out and says, we're going to be a regenerative company. And what they talked about with that was a good bit of ecological stuff. They said, we plan to be net zero. We're going to conserve this many millions of acres. But they didn't actually say much about regeneration, certainly not from the deep regenerative business perspective that has also been growing very quickly. And so I'm very fascinated to see if they can pull it off. My hunch is they won't be able to because they haven't really seen any signs except for a little bit from the CEO that they can think regeneratively. But it is a a clear sign of the growth of the buzzword.
SPEAKER_00:Yeah. We're in the hype cycle, definitely climbing up the hype mountain at the moment.
SPEAKER_01:Absolutely. And whether or not Walmart does regenerative agriculture or figures out how to become regenerative, which I hope they do, but I think they have a long way to go in the business side to do that. That was a major signal to all of their suppliers and to all of the major companies
SPEAKER_00:that if you have ingredients, if you have brands that are using ingredients that have been grown using one to 20 regenerative practices you can knock on the door and say hey look guys and girls we have something you should be selling this because
SPEAKER_01:and even beyond that like the general customer awareness that regenerative what is I don't even know what that word means now Walmart's saying it so many CEOs are now thinking wow what is that so I think one of the things that means is that any interest that we've seen so far in our work on regenerative agriculture on regenerative business on decision making on supply chains any work you done on investing in regenerative agriculture, there is a big wave of interest coming in our direction. And I don't know, maybe you've experienced a bit of this yourself.
SPEAKER_00:No, absolutely. I think the podcast was already, I mean, the community and the podcast was already on, let's say, the way up in terms of just sheer amount of downloads, sheer amount of inbound emails, people reaching out, people calling into the webinars we're doing, asking anything, the people on LinkedIn, et cetera. But definitely COVID and the focus on food and the focus on environment, especially in our let's say extended bubble has helped that like every interview we've published so far has been doing better than the one before and also the ones going back actually are still gaining quite a lot of listeners and it's really compared to a year ago it's a huge huge growth in sheer number of interactions number of listeners number of people reaching out and number of not just the number of people also the kind of people like really experienced finance people reaching out like I want to set up a fund or I want to invest in this and this and I've listened to a lot of the episodes and what do you think about that and that so there's a lot happening that you maybe don't see on the podcast like on the public podcast one because we publish max one a week but there's a lot happening on the background as well and there's a lot of interactions happening and investments are happening there are people using the podcast as deal flow a deal flow source because it turns out it's a great way not to do due diligence necessarily but to build trust like if you spend an hour an hour and a half with me and a guest you have a good understanding if you find that guests and the company interesting or not and then you can reach out and people do it. Like investors reach out. I know family offices and private investors that reach out either through me and I'm always happy to introduce, but also directly. And that's why we do it like to make money flow to the people that are building things to regenerate soil at scale and, and oceans. Let's not forget. So it's definitely, I feel that where the wave is catching up, like we're on the surfboard and you feel that you're going up, although you cannot see it because everything else is going up as well, but it's starting to bubble a lot faster and more vividly than it has done. I mean, since I started following this space, in 2011
SPEAKER_01:it's very exciting it's very exciting and i think i mean it makes me wonder if the like if the actual entrepreneurs generating deals generating projects investable opportunities if that will even grow as fast as the demand grows
SPEAKER_00:no i think it's you're right i think there's a shortage of i think the money part is exploding like a lot of people trying to get in and we can talk about if they're investing in a regenerative way i mean many of course are looking for the typical return the typical speed the typical time horizon that et cetera. And I hope people learn or see that that's not the case here. Like this, we're talking about real economy. We're talking about nature. We're talking about a lot of things that take a longer time or different time horizons. But I think what we're not missing, but what we absolutely need more of is people building things in the space. And by things, I mean, entrepreneurial farmers, I mean, funds, investment vehicles, companies, food companies, technology, everything else that we need for this revolution is going to require companies to build things And we definitely need more of that because there's going to be a lot of money trying to get into the space and we need places to put it.
SPEAKER_01:It's almost kind of like maybe we should start a like a venture studio or something that actually, you know, we can see it very clearly from both of our perspectives and we should just start building the companies and maybe raise the fund to do that. That would be fun.
SPEAKER_00:That would be fun. Let's say in the background, we're playing with a few things. I know a few people that are on the venture studio model and trying to bring it to region. I can food shout out to the ones that are listening and know that I'm talking about you. Hopefully an interview soon. That's definitely an invite. And it's, yeah, we need a lot of people that have experience. I was discussing it this morning with a very successful entrepreneur that turned his attention and of his team to food and ag. And we need very experienced people that are experienced too, that have built stuff, that have gathered teams, that have raised potentially money, or at least have built companies. Could be big, could be small, but have experience in building things. We need them desperately in the region ag and food space because we're going to need, we're running out of time and soil. So we're going to need people that have experience in building larger organizations, could be NGOs as well, but we need people that have built organisms that can make this change happen. So I'm inviting anybody to reach out if you're building such things. And because there is money in the space, there's going to be a lot more if the wave is correct. Not all of it is going to be applicable and relevant, et cetera, et cetera, et cetera. But it definitely is a very interesting moment for the sector, honestly.
SPEAKER_01:Just picking up on something you said before about money looking at Regenerative things, but maybe not doing it in a regenerative way. I thought I would also just call out a small paper published last month that was on this exact topic of not just what do you invest in, but how do you invest and what's the deeper why that motivates how you invest on four different levels from a more sort of extract value to do less harm to I want to do a bit of good to an actually regenerative way of investing. And so that paper is called called Food System Investing in a Regenerative Economy. And it's part of this larger collaborative that I imagine your listeners will be really interested in, which is called the Regenerative Economy Collaborative. And it's a community of practice that is writing on the concept of a regenerative economy from a regenerative paradigm. So not just taking an older perspective of finance and saying, well, let's look at regeneration and write about it. But actually a group of people who have been in, some people for 40 years, thinking and working in a regenerative way and saying, okay, what if we apply this way of thinking to the economy? And so there's been some really cool foundational articles on what it means to be an economic shaper, looking at modern portfolio theory, modern financial theory around regeneration. So there's a bunch of cool articles of which the one I wrote is just a small piece on these different levels of investing.
SPEAKER_00:I really liked the article. We'll link it below in the show notes on the website where you can find show notes. I think it's a crucial point because we cannot apply... quote unquote traditional vesting because it's not so traditional. It's relatively recent, but let's say the model we've been, even the funds we've been using to invest in software companies. I mean, it's, I think it's ridiculous to imagine that that would work in food companies that make food as medicine. Like it's a completely different set of variables. And then if you apply regenerative thinking to it, you really go four or five, six steps further. And I think we, it's a continuum in a sense that we have definitely a number of investors that really, really think deeply about it. but a big group of like are maybe at step three or four. Like they're thinking, okay, soil is interesting. Agriculture has to change. Maybe I have to change slightly how I invest. And then slowly you get sucked into it. I think some people that are listening know what I'm talking about, but it's definitely a much deeper process than simply moving a bit of capital from one agriculture practice to another, which is absolutely necessary. Let's remove as much as possible. But this goes a lot further, which one of the reasons why I like this so much, because you have to start changing the way you think and operate to really imply or imply all the regenerative practices you want to like it you cannot escape the deep philosophical questions almost and which is amazing when you talk to farmers that are applying regenerative practices they're especially if they've been doing it for a while they're a few of the most philosophical people you ever meet because they really thought about this stuff they thought about emergence they thought about they see it every day they thought about observing they see nature operating and you cannot help but become very very philosophical
SPEAKER_01:I can tell though that we haven't talked for a while because now you're using this term regenerative practices like it's a thing. That doesn't exist. It doesn't work. There's no such thing as a regenerative practice.
SPEAKER_00:I know, but I switched from saying regenerative agriculture, like just as there's no definition, which I keep pointing to your amazing article on the agriculture continuum. And as a farms that are applying practices, in this case, building soil, but that's too long. So I say regenerative practices, which is also incomplete.
SPEAKER_01:Why don't you say regenerative approaches? Regenerative approaches is better because when you say practices that just means the farming practices that are the best practices which doesn't actually work because they're different different places but a regenerative approaches can actually be the mind and the principles and the decision methodology and all of that and then they may also do some practices but when you say regenerative practices it makes everybody think there's a checklist of regenerative practices I just got to do them and then I'm done which is like the antithesis of I'm allergic to that idea
SPEAKER_00:I will try to pay attention to that I I'm trying to understand stop saying regenerative agriculture as like, okay, this is regenerative farmer. Like that's the, because it's, I get really allergic when people say that. I'm trying to like, there's not such a thing. You can be applying practices for the people that don't want to go too deep into the stuff, but you're right. Approaches is a better, is a better term.
SPEAKER_01:At least in English, there's probably better words in all sorts of language, including the indigenous languages from all over the world that we're doing regenerative agriculture, horticulture, regenerative life ways for so many, you know, thousands and millions of years. But English is a kind of funny, tricky language. And so it's all the more important to be that much more focused on it. But that actually connects to a point that I was going to make just before you started saying practices again, which is what you were saying about how investors shift and how they can kind of change. And you were talking about these different steps and I laid it out in four levels. I think one of the key things to have that happen, and I'm going this direction because I think both you and I are working on this, is not just to have it be like an idea that you read an article and then go, do but to actually grow communities of I was about
SPEAKER_00:to say practice. I know, I know. Approach. You didn't say approach. Told you.
SPEAKER_01:So, you know, communities of practice, communities of integrity, of people who are working together over time, who commit to coming together to be working their mind, not just talking about practices, but noticing how do I think, how do I work, disrupting that in a regenerative paradigm. That is so key for long-term change because it does take time. And I think it takes community in order to help evolve up those layers or step through those steps you're talking
SPEAKER_00:about. Yeah, it's super interesting you bring it up because one of my day jobs, that's not true, I spend about a day a week at Tonic working with a lot of impact investors. And we just launched a working group specifically on regenerative ag and food. And it's going to have, I mean, we just launched it, so we don't know how long it's going to continue, but it's going to have that, at least we're planning to, continuous touch points. And it's part of a lot of other work we're doing to basically take impact investors on a journey. And this is a group of impact investors that has a deep interest in soil and food. Some are new to the space. Some are much more experienced and have made a number of investments, but they all have expressed the interest to make more investments. And we're going to do it together. We're going to share deal flow, due diligence, and looking at, we at Stonic are facilitating, we're not doing the investments or the due diligence, but bringing our members together that have a deep interest in this specific topic and facilitate the connections, the learnings, mistakes, and everything else to slowly start moving more of their portfolios. They are moving more of their portfolios towards this. And of course, we're going to see a lot of different things and a lot of different levels of regeneration a lot of different levels of approaches and that's all fine but it's also a very big internal work which i think through doing deals and looking at things you're going to discover a lot of things about the internal work that actually needs to happen on the almost in the back end
SPEAKER_01:yeah totally and in a similar vein you know my work at how good is working primarily in the food system with agriculture with supply and with some of the largest companies in the world and so i have recently launched a regenerative supply innovation working group because so many companies both you know really cool tiny startups and small but established players and then some of the really largest companies in the world have said we want to do regenerative agriculture we want regenerative supply but there isn't a lot out there and so you know just like we were talking about
SPEAKER_00:where do we buy our ingredients where do we go to
SPEAKER_01:exactly the demand is growing much faster than the supply and so I just launched an invite only community and ask people to commit for a full year to come together and work on supply in this innovation working group format that we do using regenerative business technology. So it's not the same kind of multi-stakeholder, complex, lowest common denominator approach that is so prevalent. There's lots of examples out there. Some of them are doing really great work, but this is a regenerative business way of thinking, but we're going to have this group that's actually ending up being about 30 different companies from the largest to the smallest.
SPEAKER_00:And are you looking then at specific ingredients or looking at their specific questions around ingredients or how would that sit?
SPEAKER_01:Basically, the curriculum is designed around each company. So everybody's going to be bringing their own supply system. I'm not offering any content. I'm not going to tell you how to do rice regeneratively or sugar or monk fruit or apples. I'm not doing any of that content.
SPEAKER_00:Apples you would know actually.
SPEAKER_01:Exactly. That's where it gets hard
SPEAKER_00:is I have to... Just as a side note, if you don't know Ethan, he's an Apple farmer as
SPEAKER_01:well. So I'm going to be inviting processes and interactive work and sharing some of the regenerative thinking frameworks so that each of the companies will work on and develop their own supply system. Because if it were just so easy to say, oh, well, here's a regenerative supplier, there's a regenerative supplier, then I just do that and tell people where it is. The reality is the supply isn't out there. And so you have to work in a regenerative way with your company, with the procurement team, with the R&D team, with the marketing team and then actually develop your supply system to match your company, to match your products, to get it out of the marketplace. And that's not something you can do in a one-off workshop. That's something that needs a community of people thinking and figuring out how to do it over time.
SPEAKER_00:And Walmart is part of that or you haven't said the invite yet?
SPEAKER_01:I can't say exactly who's participating in any of these fully super confidential invite only.
SPEAKER_00:But still 40 players is a good amount. 30. That's it. 30 players, but still huge and and small players for sure and there's going to be an 80-20 rule but that is a year potentially a lot of change which some of it they might have done by themselves and it's not a way you run a control group but I would be surprised if it didn't speed it up let's say if it doesn't like significantly cut down a lot of these things to make it very concrete very interesting
SPEAKER_01:yeah and I think the commitment is key some people say oh can I just come and try it out I'm not sure if I'm going to get value out of it let me just come for one session I say no you can't do that and
SPEAKER_00:they've pay as well for the full year like it's yes yeah so it's a full education
SPEAKER_01:you have to commit you've got skin in the game and you're gonna i say you have to show up for all 12 sessions they say oh can i just swap out for a different person because i can't make this so i said no you can't do that because it's not like i'm delivering i'm not giving you the knowledge
SPEAKER_00:so that you can watch the webinar recorded no
SPEAKER_01:exactly i'm developing you as an individual person in your capability to see systems and work towards regeneration and think in a regenerative way and you have to show up and you have to do the exercise and you have to be thinking on it in order for that to happen you can't just have somebody come in and get that and transfer it it's like it's actual human development it's about how humans learn over time and these are the people who are decision makers that will guide the work that these companies do
SPEAKER_00:super super cool very interesting
SPEAKER_01:so I can't say a lot about it but I wanted to say a little bit about it and also just say you know this one is full and starting this week but I think based on the interest we'll do another one in six months or something like that and so Yeah.
SPEAKER_00:Another cohort. Yeah. Very. So they should, if they want an invite, they should reach out to you.
SPEAKER_02:Exactly.
SPEAKER_00:Very good. And then what is Lattice? I mean, one of the reasons we're doing this check-in interview and there are always 6 million others, but one of the main reasons we connect often, but we connect to let's do a check-in is Lattice. And part of how good, can you explain what it is and why it's such a game changer for the sector?
SPEAKER_01:Yeah, I'm really excited about Lattice. This is an impact platform. It's software as a service that brings together basically the last 14 years of HowGood's research on global supply systems, agriculture, environment, human rights, labor risk, animal welfare, and brings it all into one database and then puts it immediately into the hands of decision makers at primarily food producing companies. There's also health and beauty coming, but one large health and beauty company has gotten exclusivity, so there won't be health and beauty available broadly for a while. But for food, we're launched and getting it out there so i think maybe for listeners who haven't heard about how good i should just say a little bit there and that'll give context for lattice yeah so how good is a tiny venture-backed startup that has built the world's largest database of product and ingredient sustainability so we look at 127 individual different sustainability metrics we have 33 000 different ingredients chemicals and materials in the database so that's everything for food It's everything for health and beauty. That's everything you need for packaging. And then we've pulled over 450 different data sets, which are a huge array of things from, you know, life cycle assessment data to NGO reports to academic publications. We've pulled and centralized and harmonized all of this data so that we can rapidly assess any ingredient and any product in the industry. We've got a million products already in the database at the individual UPC level. Thousands and thousands of...
SPEAKER_00:Meaning this specific peanut butter and this specific...
SPEAKER_01:Exactly.
SPEAKER_00:Steak, olive oil.
SPEAKER_01:Steak, this specific granola bar.
SPEAKER_00:Mostly supermarket focused, right?
SPEAKER_01:Exactly. So we have a million of those. Well, I mean, we, how good started in small natural food and specialty. So we have a huge number of those really, you know, cutting edge products, but then we're also working with large players like a hotel has just 2000 stores in the U S 4,000 stores in Europe. And, you know, we have 95 or greater percent coverage of every single thing in their stores. So it is broad scale, but then we also are always keeping our eyes on, on what's popping the cool, innovative brands that are out there and assessing those also. So for years, we've done this assess individual products but what happened was we realized we're gathering more data than the retailers themselves were using and so then we thought okay somebody must be interested in this finer grain data in not just like is this a great product for the world or is this just a good product for the world but like how many kilograms of co2 equivalents per kilogram of this material how much water in a stressed area is being used what is the specific labor risk and working conditions in the supply chain of all the 20 ingredients in this product and so we we partnered with Danone and developed this platform called Lattice that basically takes all of that information and puts it on the screen in front of you at the click of a button. So if you're a product developer and you're interested in a new ingredient, I don't know, sumac or acerola cherry or a monk fruit, but you don't know anything about it, your procurement team is overloaded, doesn't have time to look into it, your sustainability team's working on the report, you've got to get some information and make a decision about your product. You just click into lattice, you type in that ingredient, it pops up, and then you can get any one of these many, many different metrics and instantaneously understand them. But you don't have to have a degree in ecology or human rights or life cycle assessment in order to understand it because we use the spectrums. So just like you've been working on the regenerative agriculture spectrum, we use this concept of a spectrum from the most degenerative to the most regenerative and have a simple color scale between them. and lay that across greenhouse gas emissions water biodiversity soil health labor risk processing so very quickly without looking at any decimals or really having to know that much you can see the colors and go oh shit there's a red spot here that's you know high water usage oh no there's you know cocoa from west africa there's a high labor risk so you can very quickly see and then you can improve the product so it's great for baselining right you could baseline and it's You know, thousands of products, product portfolio in a matter of weeks and just have an actual baseline there. And then you can go into an individual product and say, well, what if I changed out this almond? What if I changed out this apple instead of getting a conventional one from China? What if I got a regenerative one from Chile? Or what if I got a fair trade organic one from Ecuador? And then immediately it changes the metric. So you can see real time. You don't have to wait six months. You don't have to hire an outside consultant to check on it. You just make that change and boom, you can see how the product improves.
SPEAKER_00:And how deep does it go in a sense? Like, okay, I'll change the one from Chile to Ecuador, for instance. Is it, I don't think it is, but I'm asking, is it at a farm level in a sense? Because between farm and farm, obviously, there could be enormous differences. neighbor and neighbor is a whole different game. Maybe not because of the labor risk and political risk. The risk, yes, the actual practices and approaches are different. How granular do you get with almonds or apples or these ingredients as the difference could be whatever X?
SPEAKER_01:We can get all the way down to farm level.
SPEAKER_00:If the data is there, I think, yeah.
SPEAKER_01:If the data is there.
SPEAKER_00:It's not that you're going to Ecuador and say, okay, this farm is here and that farm.
SPEAKER_01:That is not how goods work. But much of that data is available And through our partners and through something that's happening more and more, which I want to talk a bit more about around supply, we're getting more and more detailed data down to the farm level. But the majority is not. The majority starts at these heuristic levels of granularity and industry averages. So our approach is we take and can use the most granular level of data that is available. So if you are a company and you know you're sourcing from this farm and you have soil tests and you have modeling from any of the other platforms, from Cool Farm Tool, from SAI, from Granular, from anything you have, we can take that very detailed data and put it into the system. And then you can pop it up next to the industry average, next to the state average, next to all the farms that are using organic certification in that region. So you can see these multiple layers of detail. One of the challenges that I think is out there in the world is that many people think you have to have that farm-level data for every single point in your supply chain. And that's impossible. Nobody has that yet. And so then people are stuck. They stop. And they say, well, we can never know all that, so we're not going to make any decisions. That's a waste of time. We don't have time for that in the world right now.
SPEAKER_00:We need to clean up way faster and then get better over time.
SPEAKER_01:Exactly. So we give you highly accurate directional information right from the start.
SPEAKER_00:Because if you swap the worst two or three ingredients and you swap them for a lot better one, for sure, like your average score changes dramatically because it's on the worst ones where probably the most negative impact is and not just the top one or two ingredients you use and you're super happy about because they're already fair trade and organically certified and ROC, et cetera, et cetera.
SPEAKER_01:Exactly. So we'll work with whatever data is there. And then over time, like if you don't know anything about many times, you know, various companies that we have talked to and work with, they don't actually know where their supply, they don't even know what country it's coming from, which is understandable because of the, you know, opacity and complexity of the global supply system.
SPEAKER_00:So
SPEAKER_01:that's where you start. We don't know either, but let me go check with our suppliers and say, okay, before you go, let me tell you this. We think based on where you're manufacturing and the scale and what you're manufacturing, that you are most likely sourcing that cane sugar from Dominican Republic and go ask your suppliers that. And then they'll come back and they'll say, how did you know that's where we were sourcing? Right. And that's the power of the heuristics and how good is built is even if you don't know, we actually probably do know where it's coming from and some details about how it's produced. And then over time, if you can get more details from your supplier or you know directly then we can add that in and the system gets more and more precise but there's no excuses for not getting a look at it now and starting to make decisions in the right direction
SPEAKER_00:yeah you have to start mapping yeah we're just as as honestly as impact investors there's no excuse now for not mapping your portfolio and have a good understanding of what you actually invested in and there might be some nasty surprises and skeleton in the closet you thought i'm really still part of that fossil fuel company and how did i actually and they probably have more damage than your amazing few angel investments into something solar etc can ever do like clean up get to a good baseline and start going deeper from there but the cleaning up part or getting a good overview like having an understanding what you actually own i know lisa pritzker always like actually good do a good research into what you own and then start from there but unless you know that unless you know what kind of ingredients you're even buying and where they're from you what where do you start going and improve from there. Very interesting.
SPEAKER_01:And I'm sure one of the things your listeners are thinking about right now is, could you combine forces with what Kun just said and what Ethan was talking about and do how good software for investments? And I'm going to say yes, but don't email me about it right now because... I
SPEAKER_00:saw a button on there for investors actually. There's
SPEAKER_01:so much interest and we are working on it. It's harder with investment portfolios than it is with food products because so many funds, you can't see exactly what it is or even if you know what the funds are investing in, you can't see exactly where the holdings are, but we actually have some methodology. I've been working with some really cool folks thinking about this to build out some of the modeling for portfolios that would basically allow you to type in a ticker symbol and then see what the impact is in all of these different metrics. So that's on the way. It's not here yet.
SPEAKER_00:The public side is probably easier because there's so much data on the private side is where it gets really, really complicated. It's what we see at least internally. Like we're mapping a lot of the portfolios of our members, which they share with us from and it's really really difficult to and we're building some pieces i will put a link in on tonic tracer we're building some pieces of software on that on both sides so basically let the investor declare why they made that investment both on the impact theme level on the scg level because it could be very very different and then going to the investment or the investment fund and ask the same thing like what are you tracking what are your metrics what are your kpis and hopefully if we do that enough times then we don't have to ask that fund again because they already mentioned it so we get a database with a least all the impact funds and let's say the larger direct deals etc that have declared what they are tracking are they tracking inequality are they tracking co2 are they tracking of their portfolio companies of their company themselves etc etc so not every single investor who is going to reach out again and ask okay are you tracking that can you please like that needs to be i wouldn't say centralized but database somewhere because we need to know and pension funds need to know investors need to know and it needs to be tracked and you'll be surprised how much of it is tracked and how sometimes how little of it is tracked Like, okay, just seeing the inequality data, like how many female founders do you have in your fund? And many people have not even asked that question ever. And it's really, it starts with that question, like just asking it.
SPEAKER_01:Well, and this can actually connect something to, which is the next level of Lattice. So my role is chief innovation officer. So we designed Lattice two years ago. It launched with Danone as a primary partner. There's a bunch of others that are coming online. There's also a number of other companies that are using the data that sits behind Lattice even to communicate publicly. So Chipotle restaurant, fast casual, excellent restaurant here in the US with really high quality standards on its sourcing is also using the data behind it and they're putting it on their receipts. So every time you buy a burrito or you buy a bowl, you actually get some numbers about the relative amount less of CO2 that went into the atmosphere. And it's powered by how good data.
SPEAKER_00:It's
SPEAKER_01:powered directly by how good data. So there's a lot more use cases of this. This is also something I see that's happening, not just how good it's doing this, but that sort of information insight on carbon footprint is going to be growing very very very quickly
SPEAKER_00:true price did a pop-up shop in amsterdam like what is this coffee actually cost and what does this and they put like the real cost and then the actual climate cost plus social etc and i think there's a discount discount supermarket in germany yeah that has been communicating the real price which you would never expect from this kind of job but they have been communicating the real cost actually of your chocolate bar of your bag of potatoes of your and i made quite some headlines i will see I can find a link
SPEAKER_01:expect to see this you know growing significantly and how good has some other offerings that are about to launch in this space but the thing that we're really heading towards that I'm now turning my attention on to is how do you build out the supplier side of our database so that when you find out oh fair trade organic chocolate is actually going to score a lot better in the system well what suppliers what co-ops have fair trade organic chocolate at the scale that you need it to produce. Or, oh, you want a dry farm Spanish almond? Well, where do you actually get that? So now what we're building out, and the first thing we're going to do, and the reason I'm mentioning it here is because some of your listeners are from the production and supply side of things. We're not going to try to boil the ocean and put every single supplier in the world of every type of material that's out there. We're going to start with the regenerative supply. So anyone who's out there who's actually producing high quality or even heading toward transitional to regenerative generative, we're going to get you into the database first so that our partners, small brands and large bands can click in and say, oh, exactly here, this will make my product better, but where do I get the supply? Here's a link to, you know, this supplier or that supplier that might actually have that available. So that's the next thing I'm working on building is the supplier side of the database.
SPEAKER_00:Super exciting. We have to check in way more often than this, and we have to be very conscious of your time because you have another call coming up. And I want to ask the last question that I've been asking but I've never asked you, is what if you would wake up tomorrow and you have a$1 billion? We mentioned it a bit with the Venture Studio, but what if you would have a$1 billion investment fund and you'll be free to invest it whatever you like? What would that portfolio look like?
SPEAKER_01:I think I would launch... a venture studio for each major climate geographic zone in the world and have them centered in that place.
SPEAKER_00:On a farm?
SPEAKER_01:Yeah, probably on a farm. Like one of the things about regenerative agriculture is that it is unique to each place and expresses the essence of each place. So I think, you know, starting one in each major geographic climactic zone would be a Mediterranean one and a deep tropics one and a, you know, a like cold tundra one, right? You'd have each of those, but then one of the things that those would be tasked with doing is understanding the different life sheds, not just water sheds. Water sheds is the wrong way to think about it. It's separating out water from the rest of life.
SPEAKER_00:But it's easy. When a drop falls here, where does it go? It's a linear thing.
SPEAKER_01:Right. Oftentimes it helps, but you need to see a whole life shed, the economic, historical, cultural, biological, ecological, spiritual, psychological entity of life, so it's find those different life sheds all over the world and support each of them to be growing investment communities within them. So the most powerful thing I would do with investment is multiply the investment by growing these life shed centric investment communities. And I read a little bit about this in the article we talked about. Okay. That's one thing. The other approach, and I wouldn't, I don't think I'd spend any money on the government side of things on policy. A lot of people think policy is a good idea. I agree. I think it's really important. It's not for me. I'm going to take a business route.
SPEAKER_00:A lot of people are doing it. I think if you look at my decision-making framework or my effective algorithm, et cetera, is it neglected? Is I think the most crucial question and policy, I'm very happy other people are doing it, let's say. A lot of people reach out, why are you not interviewing people of the European Union, et cetera? It's just not for me. And I think luckily a lot of attention is going there, but sorry, go
SPEAKER_01:ahead. Well, I think you and I both have a bias for action. And so we see that the investment space and the business space are places where action can can happen quickly without getting a lot of... And so that's actually where I would put some of the rest of that billion dollars is use it as an instrument to get deep connection with the CEOs and boards of the major companies in the world that have to do with agriculture. Because when you can get CEO and board level thinking change on not just like, oh, we should do regenerative agriculture, but as we discussed earlier, I want those people committing to an amount of time in a room each month together
SPEAKER_00:with their top people
SPEAKER_01:regenerating how they think about agriculture about supply about investment because that is what will quickly shift the whole I mean you can look at I think Paul Holman you know from Unilever now has something that is basically aiming to do this I wouldn't do it exactly the same way and it would be more from a regenerative place but something along those lines I think would be a really really key and then I'd probably invest there's a bunch of just purely to make money off that billion. There's a whole bunch of, I think, really cool farmland investments that are more mature that we don't need as much research. We don't need as much, you know, venture development, but there are perennial cropping systems in each climate in the world. And I would do, you know, a regenerative real estate model similar to, you know, or along the lines of what Paul at SLM and some of the other great folks that you've interviewed in the funds are doing. But there's a crops that I would focus on and then also continue to think about the investment value of the real estate itself and finding ways to monetize that as well as the production because I never really want to be trying to pull investment money off of farmers back but I think there's some tested ways we could get a lot so that would be probably like 50% 30% 20% I think is how I do that
SPEAKER_00:so if anybody has a million laying around you can also reach out to Ethan and he will be your fund manager tomorrow morning it would be a lot of fun yeah no i said i like the question because i mean you're used to think about numbers and larger numbers but some people in the space are not and i love that decision making okay what would you focus on because you cannot do everything and a billion is large enough to sort of say okay a million doesn't really matter so i really need some kind of structure and decision making framework and focus to do this otherwise it just i would just get drowned and it triggers interesting thoughts it's not because it's a billion could be 100 billion could be 100 million doesn't really matter it just needs to be a large amount enough to trigger somebody to say, okay, I need some kind of prioritization. Otherwise I just get lost. And with that, I think we're done for this session. We're going to be back soon, I think. I don't think it should last. It should be as long as we did last time. I think it's almost a year. Yeah. At the end of last year when we did the map, actually. That was nice when we did the map launch. So we should check in around that again. Any last thoughts for this version?
SPEAKER_01:I do have one last thought that's in a different direction than we've touched most of this, but I'll just put it out there. There's been criticism towards regenerative agriculture recently.
SPEAKER_00:Especially after Kiss the Ground came online.
SPEAKER_01:And a whole bunch of things. And I think... for good reason there's been some questions about the integrity and the sort of whitewashed nature of regenerative agriculture basically taking the work of black and indigenous and latino and asian farmers and people of color all over the world who have been doing incredible agriculture practices and approaches and life ways for a really
SPEAKER_00:long time and yeah we had chris newman on the show a few weeks ago which was great yeah
SPEAKER_01:i think this is a really cool place to uh for everyone to explore how good innovation series is following this thread we have a number of amazing indigenous black people of color you know farmers and people from all over the food system speaking on this especially from an angle of biodiversity and cultural diversity and so those are free that's you know how good innovation series online you can find that we can put that in the show notes but then also just digging into that realm and understanding what is the indigenous ancestry of each crop of each product of each place that you're in and just going on a not triggered and not defensive and not don't do white fragility and just really like dig into it and grieve and learn and there's so much beauty there and there's so much healing that can come but not if I as a white person coming in as a savior as a missionary right with my mission based business
SPEAKER_00:now we found a solution everybody listen yeah
SPEAKER_01:so that's not going to work and I think there's a lot of really good learning to happen for everybody
SPEAKER_00:and there are a lot of very interesting If you
SPEAKER_01:would
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